According to the World Economic Outlook (WEO) report released by the International Monetary Fund (IMF) on Tuesday, Pakistan's inflation rate is projected to rise to 9.9% in FY2026-27. Economic growth is forecast to remain at 3.5% in the current fiscal year, unchanged from the IMF's previous projection.
IMF data shows that inflation is expected to increase to 9.9% in the current fiscal year from 7.1% in 2025-26. Pakistan's gross domestic product (GDP) is projected to grow by 3.5% this fiscal year, down from 3.6% in 2025.
The country's current account balance remained unchanged in 2026, and the deficit is expected to reach 1% of GDP in the current fiscal year. Meanwhile, the report forecasts the unemployment rate to stand at 6.5% in the current fiscal year, down from 6.9% in the previous year.
Globally, the lender noted that the economy will manage to top 3% real GDP growth this year as strong artificial intelligence (AI) investment offsets energy shocks from the Middle East conflict. However, downside risks are mounting, leaving more countries vulnerable to rising debt.
Despite oil prices remaining above $100 a barrel, the IMF forecasts 2026 global growth at 3.1%, a slight uptick from the 3.0% predicted in July. For 2027, the IMF predicts 3.4% global growth.
This improvement is largely attributed to continued investment in AI infrastructure, benefiting countries like South Korea, Malaysia, Mexico, and Thailand. IMF Chief Economist Silvana Tenreyro stated, "The global economy has been resilient, but that resilience is under strain, with risks to growth tilted to the downside."
She added that worsening fiscal prospects and extreme weather events could further weaken the outlook. The report emphasizes that structural reforms remain essential for Pakistan to stabilize its macroeconomic indicators amidst global volatility.
Analysts suggest that while AI-driven growth is helping global markets, emerging economies like Pakistan must focus on domestic productivity to mitigate the impact of rising inflation.